SCRS Holds Open Meeting
The Society of Collision Repair Specialists’ (SCRS’) partnership with SEMA, which began in 2010, has proven beneficial for the show as well as the association. As it has in the past, SCRS held an open meeting on the show floor one evening to highlight both some industry news and some of the association’s recent activities.
A year after Toyota used the meeting to introduce its concept of “predictive estimating,” the automaker announced at this year’s SCRS meeting a partnership with Mitchell International to deliver Toyota recommended procedures and bulletins within Mitchell’s new mobile/online estimating system in early 2014.
Toyota’s Rick Leos explained that when a user adds a part to an estimate, all of the appropriate Toyota vehicle information will automatically appear, including related Toyota bulletins or procedures, and information on such things as one-time use fasteners.
Leos said that by the end of 2014, the information will be available for all 2012 and newer Toyotas. He said he expects other automakers to make similar announcements early next year.
“Will we be with other information providers? I have every intention of sharing all the same data with every one of them,” Leos said. “I’m not trying to hold it from anybody, and nobody has exclusive rights to it.”
Also during the meeting, Tony Passwater, executive director of the Indiana Auto Body Association, urged shops to sign its online petition (http://tinyurl.com/lk8cuds) calling for an end to insurer mandates “that change our well-established business relationships, place vehicle owners in jeopardy and interfere with the free market system.”
More than 460 people have signed the petition, which calls for state and federal authorities to investigate and prosecute “the tortious interference actions of property and casualty insurance companies that have been repeatedly performed over the last 70 years,” calling insurer actions “as aggressive as a modern day mafia.”
Passwater said he’d like to see the signature count hit 10,000, and suggested that shop owners also encourage their employees to sign.
Also during the meeting, industry trainer Toby Chess used photos and actual parts removed from “repaired vehicles” to highlight the more than 20 cars he inspected over the previous two months that had improper or incomplete repair work.
“The reality is this is going on a lot out there,” Aaron Schulenburg, SCRS executive director, said following Chess’ presentation. “Sometimes it may be being improperly equipped or trained shops, but often times it’s a matter of dollars and sense on the repairs, and the pressures that are put on, and how people are being asked to do repairs. That’s not an excuse, but it’s the reality of one of the causes of these types of repairs.”
Attorney outlines lawsuits
John Eaves Jr., the personal injury attorney representing Mississippi shops and parts vendors suing State Farm over its mandated use of PartsTrader, held several meeting in Las Vegas during SEMA to explain the suit. He was also signing up individual shop clients looking to sue insurers for “unjust enrichment” based on procedures performed as part of vehicle repairs for which the shop was not paid.
Eaves said he is working with an economist to determine the likely damages in such cases, but he said an initial list of 62 such procedures has been developed, and preliminary analysis indicates a minimum loss of $675 per $3,500 repair. He said the suits could cover claims against an insurer over however long the statute of limitations allows (six years, in some states).
Eaves said that while he is not being paid for the PartsTrader case—which he said will likely soon be replicated in other states—the unjust enrichment suits are being done on a contingency basis with a 40 percent fee of any collected funds.
The PartsTrader suit, filed in Hinds County Chancery Court, alleges that State Farm’s implementation of PartsTrader tortiously interferes with existing business relationships shops have with their parts vendors. In addition to an injunction halting State Farm’s implementation of PartsTrader, the suit seeks a ruling that State Farm is violating the terms of the 1963 Consent Decree, which placed limits on more than 260 insurer’s activities related to auto insurance and claims. See the October issue of Autobody News for more on the Consent Decree.
Advice On Selling Your Shop
SCRS offered about 20 training classes during SEMA, focusing on subjects from marketing and using social media, to cycle time reduction and new bonding and riveting techniques for vehicle repair.
Among the classes attracting the most attendees was a panel discussion featuring four former shop multi-shop owners offering insights into the lessons they learned selling their businesses.
Industry consultant and trainer Mike Anderson, who sold his two Virginia shops in 2010, cautioned against revealing too much information about your business—sources of work, for example—to a potential buyer too early in the process.
“I’ve seen MSOs come in to buy a shop from certain individuals who are too free with their information,” Anderson said. “The deal falls through and then those other people open a shop right next door. It’s not a done deal until the money in the bank.”
Pat O’Neill, a former owner of seven 9-1-1 Collision Centers who sold to Caliber Collision Centers in 2011, recommends talking to a consultant or others who can help you know what you can do to increase the value of your business.
“And remember that it’s a negotiation until the very last day,” O’Neill said. “Stuff will come up on their side and stuff will come up on your side.”
“It redefined ‘coming down to the wire,’ that’s for sure,” agreed Aaron Clark, who sold his five Collision Solutions shops in Indiana to ABRA Auto Body & Glass in 2012.
Former CARSTAR executive Dan Bailey, who has been involved both as a buyer and seller of shops over his career, said it’s never too early to start preparing for the sale of your shop.
“It’s very emotional,” he said. “When you grow up in this business, there’s something that makes it feel almost shameful to sell your business. ‘What am I going to tell my friends? What am I going to tell my relatives?’ But the reason you’re building a business is to sell it. It’s very emotional so you need to talk it over with whoever is involved in the business with you, whether a spouse or sibling, and make sure you’re prepared to sell the business before you spend a lot of money working on a sale.”
John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at: